Best buys from Capital Trust Securities
- During 2010 and 2011 the Colombo bourse
reported net foreign selling of SLRs.46 billion, however during the first
quarter of 2012 the bourse has reported net foreign buying worth SLRs.20
billion accounting to 25% of total turnover reported during the same
period.
- The IMF releasing USD 427 million, the eighth tranche
of the standby Loan facility is an endorsement of the country’s economic
policies that would influence foreign investors to invest in Sri
Lanka
- The Rupee which reported a record low of 131.60
against the US Dollar on 19th March 2012 due to the high import
demand ahead of the Sinhala New Year season has risen 3.8% to 126.56 against
the US dollar.
- Earnings of export related companies and hotels will
improve as their products are now more price competitive compared to the
regional peers.
- Many foreign direct and portfolio investments which
got delayed due to unstable exchange rate will soon reach the country as the
exchange rate is expected to stabilize at current levels.
- The Colombo Stock Exchange reached an all time high on
14th February 2011, and as of date it has declined 31% from the all
time high meanwhile corporate earnings have been growing rapidly. Thus the
market PE which was 29.5x during February 2011 has come down to 14.3x. Foreign
investments are expected to drive the market as the Colombo bourse is becoming
relatively cheap compared regional markets which have shown a substantial upsurge since beginning of
2012.
- Hence it is an ideal time to
accumulate fundamentally strong shares at bargaining prices as the market
should resume its upward trend generating very high returns in the medium to
long term.
Best Buys 05-04-2012.pdf
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